The National Company Law Appellate Tribunal (NCLAT) dismissed two appeals against a common NCLT order directing eviction of appellants from properties owned by the corporate debtor, Venus Garments (India) Ltd., which was under liquidation. The appellants claimed protected tenancy under unregistered 30-year lease deeds and argued that eviction could only be sought under the East Punjab Urban Rent Restriction Act, 1949, before the Rent Controller.
The NCLAT held:
1. The liquidator was not only entitled but statutorily obligated under Sections 35(1)(b), (d), (e), (k), (l) and 36(1) of the IBC to continue the Resolution Professional's eviction application and secure possession of the liquidation estate assets. The transition from CIRP to liquidation did not render the application infructuous.
2. The NCLT had jurisdiction under Section 60(5)(c) to adjudicate the eviction dispute because it arose solely and causally from the liquidation — the liquidation estate vested in the liquidator only upon the liquidation order, creating the obligation to deliver possession.
3. The alleged lease deeds for a fixed term of 30 years were mandatorily registrable under the Registration Act, 1908, and being unregistered, could not be received as evidence of their contents under Section 49. The appellants were also found to be related parties of the suspended directors under Section 5(24) of the IBC, with no rent paid for seven years, indicating a design to obstruct the auction process.
4. Section 238 of the IBC provides a complete override over any inconsistent law, including the Rent Act, regardless of whether the non-obstante argument is specifically adopted by counsel (Innoventive Industries v. ICICI Bank). The IBC is a special, later legislation for time-bound asset realization.
5. The Supreme Court's decision in Vishal N. Kalsaria v. Bank of India (2016) 3 SCC 762, relied on by appellants, was distinguished: it interpreted the SARFAESI Act's non-obstante clause, concerned blameless third-party tenants paying regular rent, and was decided before Section 238 IBC was enacted.
6. The NCLAT's jurisdiction to order eviction by the liquidator/RP was affirmed by the Supreme Court in Jhanvi Rajpal Automotive Pvt. Ltd. v. R.P. of Rajpal Abhikaran Pvt. Ltd. (2023 SCC OnLine SC 1535) and this Tribunal's decisions in Jhanvi Rajpal (CA(AT)(Ins.) 1417/2022), Adinath Jewellery Exports (CA(AT)(Ins.) 748/2022), and Classic Marble (CA(AT)(Ins.) 187/2026).
7. The constitutional challenge under Entry 18 of List II (landlord-tenant relations) failed because the IBC is enacted under Entries 9 of List III and 43-44 of List I; its incidental effect on possession does not convert it into a landlord-tenant law. The IBC's constitutional validity was upheld in Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17.
